Blockchain in Healthcare - GetReferd
31 Jan 2019

How Blockchain can change Healthcare

There are many challenges for the US healthcare system, from multiple-step data sharing procedures, clinical trials and medical research to complex billing and less-than-optimal patient experience. The stakeholders involved in Healthcare organizations are under increasingly heavy pressure to both control costs and continue to provide high-quality care to patients. There is a massive opportunity to use blockchain technology to transform healthcare and here are five key ways it can be utilised.

However, it the technology behind what is powering bitcoin, this may hold the key to soon alleviate many of the pressures and thus, provide both patients and healthcare providers with secure, seamless, and efficient ways of sharing data, processing claims, and enhancing medical research.

The Holy Grail: What if every patient could safely and privately access the full history of their health? What if you could consult a patient’s entire vital sign history, every medicine taken, information about every doctor’s visit, illness, and surgery performed? How valuable would that be, not only to patients, but to your practice and the industry as a whole?

What is Blockchain?

Blockchain is one of the biggest buzzwords in technology right now. But what is it? And why are all your friends and family talking about it? A blockchain is really nothing more than a decentralized, secure database. It is a storehouse to validate events that happened in the past. Except it has a few enhancements over your run-of-the-mill data warehouse:

  • It is decentralized:  no single entity controls the flow of information
  • It is consensus-based:  different parties maintain exact copies of the same ledger, so everyone has to agree on the information being added
  • It is ‘add-only’: you can’t change a previous entry, you can only add to it
  • New information can’t conflict with what’s already on the blockchain
  • Anyone on the network can access and replicate the information stored there

These attributes are what allowed the blockchain to act as the distributed accounting platform to record financial transactions for digital currencies like bitcoin.lockchain technology circumvents the need for one central administrator, and it can effectively co

The bitcoin blockchain is “decentralized,” meaning it is not controlled by one central authority. While traditional currencies are issued by central banks, bitcoin has no central authority. Instead, the bitcoin blockchain is maintained by a network of people known as miners. These “miners,” sometimes called “nodes” on the network, are people running purpose-built computers that are actually competing to solve complex mathematical problems in order to make a transaction go through.

For example, say lots of people are making bitcoin transactions. Each transaction originates from a wallet which has a “private key.” This is a digital signature and provides mathematical proof that the transaction has come from the owner of the wallet.

Now imagine lots of transactions are taking place across the world. These individual transactions are grouped together into a block, organized by strict cryptographic rules. The block is sent out to the bitcoin network, which are made up of people running high-powered computers. These computers compete to validate the transactions by trying to solve complex mathematical puzzles.

The winner receives an award in bitcoin. This validated block is then added onto previous blocks creating a chain of blocks called a blockchain.

Blockchain now has incredible appeal to healthcare providers across the industry that require secure and efficient access to a patient’s complete medical history.

1. Medical Data Management

The Problem:

Medical error is in third place for the leading cause of death in the U.S., behind cancer and heart disease. A big part of this problem is the lack of transparency between medical institutions and the inability of hospital systems to safely and efficiently share data with one another.

EHRs were never conceived to manage lifetime medical data among multiple institutions. During a lifetime, patients scatter their medical records across a labyrinth of organizations and from one health system silo to the next often losing access to critical past data.

On top of this issue, different hospitals have their own ways of managing their data. A 2017 report by MIT discovered that twenty-six different EMR systems exist across the Boston area alone. With critical patient information being so costly and cumbersome to share, it’s no wonder the flow of medical data is often stifled, leading to increased risks of medical error and fatalities.

Data management healthcare


Blockchain can securely ease the transfer of patient records among health systems both nationally and across borders, and boost the coordination of member health management, lower transaction costs and risks, and even support medical tourism.

A single entity doesn’t control medical data stored on blockchains. Therefore, it can be distributed among groups of individuals and organizations. Every transaction on the chain is time-stamped becoming a permanent record of the entire whole that can’t be altered afterward.

2. Drug Development and Supply


Counterfeit drugs make up a growing percentage of the U.S. drug market and even more so in developing countries costing pharmaceutical companies some $200 billion in annual losses. Despite the fact that anyone who purchases medicine can ask for a certificate of authenticity, bad actors have been known to falsify such documents.


Blockchain in healthcare could improve traceability and transparency in the supply chain, providing both the big picture and minute details of every transaction of any pharmaceutical product. Blockchain technology is already being used to optimize supply chain integrity by companies such as IBM, Walmart, and UPS.

With supply data stored in a blockchain, patients could potentially access real-time information about any drug from production to arrival at the retail pharmacy. Barcode labeling would enable other features to be woven into the system such as:

  • Monitoring the availability of medicines in polyclinics
  • To whom medicine was transferred
  • The quantity of medication transferred

In this way, blockchains can transform the system from disconnected data segments owned by a single entity to the life history of any resource whether it’s a patient’s health record or a drug moving through the supply chain.

3. Claims, Billing Management, and Fraud


Roughly 5-10% of healthcare costs are fraudulent, and in 2014, the federal government recovered $5.7 billion in health care fraud cases. Medicare fraud accounts for some $30 million in losses annually.


Using a blockchain automation-based system could substantially reduce admin costs related to claims, payments, and processing time and make intermediaries obsolete. As the Capital One – Gem Health collaboration shows, blockchain may be able to improve the significant logistical information tracking challenges of reliability-centered maintenance (RCM) operations.


As it stands now, all claims processing is done manually, and payer networks can break down when a provider relocates or moves into or out of the payer’s network. An estimated 40% of payer’s provider data contains errors or missing information. Payers also bear the costs of verifying provider details every year. And when the data does change, it needs to get processed by a myriad of siloed systems among one or more payer networks. The result: higher costs and increased process time.


Blockchains could enable one accurate source of provider information. A Blockchain ledger could unify all stakeholders in the network: payers, providers, and patients, and increase the system’s efficiency by requiring only one update throughout the network. Smart contracts on the blockchain could transform the manual fashion in which member claims and disputes are currently processed.

Every insurance policy could be embedded in a smart contract, or program, agreed upon and accessible to all stakeholders. Bills could be automatically be validated enhancing cycle time and reducing costs and practically doing away with disputes.

4. Medical Research

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Currently, half of all clinical trials go unreported, and researchers often neglect to share their results, creating knowledge gaps for all stakeholders and putting patient safety in jeopardy.


Having a secure and centralized storehouse of clinical trials and patient outcomes for new treatments could vastly enhance patient care and results. The unchangeable time-stamped blockchain records of clinical trials and outcomes could help reduce result switching, data snooping, and unethical reporting, lowering both fraud and error.

Blockchains could mobilize new and innovative research initiatives by sharing patient results more broadly (with patient consent). Moreover, fresh and innovative research initiatives would be catalyzed by sharing patient results more broadly (with patient consent) thus driving remarkable cooperation between participants and researchers.

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5. Referral Management

Blockchains can also have a positive impact on patient referral management. Once a patient consults a physician and a treatment plan devised, the treatment program can be added to the blockchain ledger as part of the patient’s medical record.

Then, a smart contract can be developed using all the elements of the patient’s referral management. The contract specifies the framework of the patient’s treatment goals coupled with the rules defined within the smart contract to track and evaluate the patient’s progress. Once the patient’s file is incorporated into the blockchain, it can provide chronological data about the delivery of care and the patient’s response.

Another layer of benefit can be found where a patient’s health information is culled from wearable monitoring devices and social media applications and then uploaded to the patient’s personal blockchain ledger. Again smart contracts can gauge the patient’s performance toward their health goals.

The great thing about the process is that anyone in the network can view the patient’s data, but only once the patient gives their consent thereby removing the need for centralized control and lowering the chance of PHI data theft.

The Future is Here

We are not saying that blockchain is the solution for the entire healthcare industry. However, the advantages of blockchain are compelling and certainly represent a major step in the right direction as more and more healthcare organizations assess how blockchain technology can enhance their operations. As blockchains in healthcare inch closer to commercialization, we will see more and more benefits.

The increasing demand for healthcare services and integrated-care delivery along with an all in one health management record it has given rise to the need for an information management system not dependent on middlemen. The blockchain is already starting to deliver on these promises and its robustness and security show immense potential to boost healthcare performance, enhance the quality of care, and reduce the costs of delivery.

About Author

Craig Ellis

Head of Sales Engineering, with a passion for Healthcare, CRM, Business Development, New Technology, Marketing and Gadgets. Business Technology Professional, working in the SaaS Industry for GetReferd, Healthcare Software - Closed Loop Referral Management. Helping healthcare organisations to connect General Practioners to Healthcare Organisations, for referring their patients in real-time, scheduling appointments and creating a better patient experience.

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